low budget sideletter to the directors guild of …/media/c834d3ad62864326b92dc... · 2. budget...

2014 Single Project Low Budget Sideletter v 9-10-15

LOW BUDGET SIDELETTER TO THE DIRECTORS GUILD OF AMERICA

BASIC AGREEMENT OF 2014

SINGLE PROJECT AGREEMENT

________________________ (“Employer”) enters into this sideletter (the “Sideletter”)

with the Directors Guild of America, Inc. (“DGA”) governing the employment of the Directors,

Unit Production Managers, First Assistant Directors, and Second Assistant Directors

(“Employees”) employed in connection with the production of the theatrical motion picture

currently entitled “______________________________” (“the picture”), and concurrently

agrees to execute and to be bound by the DGA Basic Agreement of 2014 (“BA”) and Freelance

Live and Tape Television Agreement of 2014 (”FLTTA”). To the extent the provisions herein

are inconsistent with the BA, the provisions of this Sideletter shall be controlling.

The picture shall be covered by this Sideletter only if the budget is within the specified

Levels of production cost and it is intended for initial release theatrically. If a picture fails to get

a domestic (U.S. and Canada) theatrical release and is released in the video, pay or free

television markets, it shall remain classified as a theatrical motion picture for all purposes and

shall not be reclassified as a “Made for Pay” or “Free Television” motion picture, if, upon

completion of such picture, it is not suitable for theatrical release or Employer is not able to

obtain one.

Notwithstanding the foregoing, the picture shall not be a covered motion picture, and this

Sideletter will not apply, if it is developed by or for a domestic or foreign basic cable service,

pay television service, or free television network or broadcaster, or if more than fifty percent

(50%) of the negative cost of the picture is provided by any such entity, either directly or by


virtue of a license or agreement for other transfer of rights which is entered before the picture is

completed and used as collateral for a loan to finance the production. In that event, the BA,

including but not limited to the provisions relating to the initial salaries for Directors under

Article 10 (free television), Article 20 (pay television), or Article 23 (basic cable), and for

Assistant Directors and Unit Production Managers under Articles 13 and 23, as appropriate, shall

apply.

A picture which is intended for initial release in the videocassette/videodisc rental or sell-

through market, and which is not developed or financed by a basic cable or pay television service

or free television broadcaster as set forth above, may be produced pursuant to the terms and

conditions of this Sideletter for the applicable Level of production cost. Such a picture shall be

classified as a “theatrical motion picture” for all purposes, except that residuals for the picture

shall be paid pursuant to Article 20 of the BA.

Prior to any employee commencing DGA-covered services on the picture, the Employer

must confirm with the DGA, in writing, that it has established a written safety program to the

extent required by applicable law.

Budget

1. Submission for Classification: Before the start of principal photography,

Employer shall submit to the DGA the budget which was approved for purposes

of bank or investment financing by a bona fide completion guarantor, or if there is


no completion bond, the budget in effect upon commencement of principal

photography signed by the Unit Production Manager and an officer of Employer.

2. Budget Definition: The production cost for the picture shall consist of all direct

and indirect costs actually incurred in connection with the picture. The only costs

excluded in determining the production cost for purposes of this Sideletter shall

be financing costs (i.e. loan origination fees, gap fees, legal fees and interest),

contingency of up to ten percent (10%), essential element insurance costs, the cost

of the completion bond, marketing expenses, contingent payments to talent or

other parties which are based on the proceeds derived from the exploitation of the

picture and received after recoupment of the negative cost, and delivery items

required by sales agents, distributors or subdistributors (i.e. delivery materials

beyond the answer print or the NTSC Video Master if the picture is delivered on

videotape, or the digital equivalent if the picture is delivered in a digital format).

For the avoidance of doubt, federal, state, and foreign rebates and tax credits shall

not be excluded from the budget in determining the production cost or deducted

from the Final Cost Statement.

3. Submission of Final Cost Statement: No later than sixty (60) days after the

completion of the answer print or 18 months after wrap of principal photography,

whichever comes first, Employer shall submit to the DGA the Final Cost

Statement. The Final Cost Statement shall include all actual costs incurred in

connection with the production of the picture (i.e. those costs commonly referred

to as the “negative cost”) which are not excluded in the first paragraph


immediately above. The DGA shall have the right to review and audit records

relating to the cost of the picture. The DGA shall have six (6) months from the

date of receipt of the Final Cost Statement to notify Employer of a challenge or

claim concerning the appropriate Level of production cost of the picture. After

said six (6) month period, the DGA shall be deemed to have waived the right to

challenge the budget, or Level of production cost of the picture. Costs incurred

on account of force majeure events, default or disability of major talent,

government action, or reshooting due to faulty negative caused by technical

problems outside of Employers control, shall not be counted toward the

production cost.

If the actual final production cost of the picture exceeds the estimated cost, as represented

in the budget submitted to the DGA, by more than the budgeted contingency of not more than ten

percent (10%), and such final production cost causes the picture to fall within a Level, as defined

below, higher than its original Level, then the picture shall be reclassified into such higher Level,

in which event the provisions applicable to the higher Level shall apply and all salaries and other

terms shall be adjusted accordingly and paid within thirty (30) days after submission of the Final

Cost Statement.

The currency rate in effect on the earlier of the date the bank financing for the picture

closes, or the start of principal photography, will be used for purposes of determining the budget,

and the final cost, of the picture.


I. Level 1. Any motion picture, the budget of which is equal to or less than

$1,100,000, shall be deemed a covered motion picture and the employment of Employees

shall be subject to the provisions applicable to a Level 2 motion picture except:

A. Director’s Compensation and Guaranteed Period of Employment: The Director’s

initial compensation and daily rate (if any is agreed upon), guaranteed period of

employment, and whether, and on what basis, the Director is “pay or play,” shall

be subject to negotiation between the Director and Employer.

B. Article 13-Unit Production Managers and Assistant Directors:

(i) For a picture the budget of which is less than $500,000, the initial

compensation shall be subject to negotiation between the individual

Employee and Employer, provided that the salary paid for any hour of

work shall in no event be less than the federal or state minimum wage.

(ii) For pictures with budgets greater than $500,000, and equal to or less than

$1,100,000, Assistant Directors and Unit Production Managers shall be

paid no less than a discounted initial minimum salary equal to thirty-three

percent (33%) of the minimum weekly salaries in Paragraph 13-101(a) of

the BA, provided that the salary paid for any hour of work shall in no

event be less than the federal or state minimum wage. For work performed


from July 1, 2014 to June 30, 2015, the salary for a Second Second shall

be no less than $720.00/week or $180.00/day.

(iii) There shall be no minimum production fee. There shall be no minimum

preparation period.

C. Article 14 – DGA Trainees

(i) For a picture the budget of which is less than $500,000, the initial

compensation for DGA Trainees shall be subject to negotiation between

the Directors Guild-Producer Training Plan and Employer, provided that

the salary for any hour of work shall in no event be less than the federal or

state minimum wage.

(ii) For pictures with budgets equal to or less than $1,100,000, DGA Trainees

shall be paid no less than a discounted initial minimum salary equal to

thirty-three percent (33%) of the minimum salaries in Paragraph 14-103 of

the BA, provided that the salary paid for any hour of work shall in no

event be less than the federal or state minimum wage.

(iii) All other provisions of Section 14-100 of the BA apply to the employment

of DGA Trainees.


II. Level 2. On motion pictures with budgets greater than $1,l00,000 but equal to

or less than $2,600,000, the employment of Employees shall be subject to Paragraph V

hereof, and the following provisions of the BA, as modified below:

A. Article 1-Recognition and Guild Shop

B. Article 2-Disputes

C. Articles 3 and 4-Director’s Compensation and Related Matters: The Director’s

initial compensation, daily rate (if any is agreed upon), and preparation time will

be subject to negotiation between Employer and the Director. The Director shall

be pay or play for the “run of the picture” beginning the earlier of (a) the closing

of the financing for the picture, (b) issuance of a completion bond or guarantee,

(c) the date any cast member becomes pay or play. The pay or play obligation

shall be satisfied by payment of the agreed salary owed for the unexpired period

of the Director’s guarantee. A replacement Director shall receive compensation

equal to no less than the remaining amount due to the previous Director.

Second Unit Director: The salary and preparation time for any Second Unit

Director shall be subject to negotiation between Employer and the Director.

D. Article 6-Suspension and Termination of Directors, except as modified herein.

E. Article 7-Director’s Minimum Conditions - Preparation, Production, Post

Production, except:


Preparation and Preview of Director’s Cut: In lieu of the ten (10) week period

provided for the accomplishment of the Director’s Cut in BA Paragraph 7-

505(b)(1), Employer shall provide the same number of days for the

accomplishment of the Director’s Cut as were provided for principal photography

(but in no event shall the period for the Director’s Cut provided pursuant to this

agreement be less than twenty (20) days), followed by a screening of the

Director’s Cut pursuant to BA Paragraph 7-505(d).

There shall be no mandatory preview of the Director’s Cut or of the picture. The

Director will be notified of any preview as per the BA. Employer will send the

Director to any preview conducted by Employer outside of Los Angeles or

Orange County as per the BA; the Director need not be flown in first or business

class, but will fly in the best class afforded by Employer to anyone else attending

the preview. These obligations do not apply to previews conducted by third-party

distributors, unless they are signatory to the BA.

F. Article 8-Director’s Credits, and BA Paragraph 13-209, relating to Unit

Production Manager and Assistant Director Credits

G. Article 9-BA Paragraphs 9-102, 9-103 and 13-214(c), relating to Travel Insurance

H. Article 12-Pension and Health Plans


I. Article 13-Unit Production Managers and Assistant Directors: Assistant Directors

and Unit Production Managers shall be paid initial salary no less than fifty percent

(50%) of the minimum weekly salaries in Paragraph 13-101(a) of the BA. Daily

salaries shall be computed at 1/4 the weekly rate. The salary for distant location

shall be the same as the studio rate. A sixth or seventh day worked in a workweek

shall be paid at straight time (i.e. one-fifth (1/5) of the weekly rate if a weekly

Employee). The production fee for all Assistant Directors and Unit Production

Managers shall be $25.00 per week for either a 5-day or 6-day workweek; the daily

production fee is $6 if employed on a daily basis. There shall be no Vacation Pay

(4% per Paragraph 13-601), Unworked Holiday Pay (3.719% per Paragraph 13-

115), Distant Location Allowance ($20.00; $21.00 effective 7-1-15) per Paragraph

13-114), Wrap Supervision Allowance ($50.00; $55.00 effective 7-1-15), or

Completion of Assignment Pay (Paragraphs 13-103 and 13-104). Assistant

Directors and Unit Production Managers who work on a holiday (as specified in

the BA, Paragraph 13-113) shall be paid 200% of the daily rate; Employer may

deduct a day’s pay from the weekly salary if an Assistant Director or Unit

Production Manager does not work on a holiday which falls within that week. Any

Second Assistant Director hired in addition to the Key Second Assistant Director

may be paid no less than discounted initial minimum salary equal to fifty percent

(50%) of the minimum weekly salaries in Paragraph 13-101(a) of the BA for an

Additional Second Assistant Director.


Preparation Time: The First Assistant Director shall be guaranteed no less than

seven (7) days preparation time; the Key Second Assistant Director shall be

guaranteed no less than three (3) days preparation time.

Extended Workday: Assistant Directors and Unit Production Managers shall be

entitled to extended workday payments pursuant to BA Paragraph 13-110 (a), (b)

and (c).

Rest Period: Assistant Directors and Unit Production Managers shall be entitled to

rest periods pursuant to BA Paragraph 13-116.

J. Article 14: Employer may employ one Assistant Director or one Unit Production

Manager who is not on the applicable Qualification List (as defined below). With

respect to all other classifications covered by Article 14 of the BA, Employer shall

make a reasonably diligent effort to find Unit Production Managers or Assistant

Directors (as the case may be) on the applicable Qualification List before

employing any person not on the applicable Qualification List, and must document

that effort at DGA’s request. Employer may not offer better rates or conditions of

employment to non-Qualification List Employees than those offered to

Qualification List Employees.

Applicable Qualification List for purposes of Level 1, 2, and 3 pictures, shall be

defined as the Southern California Entertainment List, the New York

Entertainment Qualification List and the Third Area Qualification List.


Individuals on any one of the applicable Qualification Lists may be hired to work

in any geographic location.

In addition, with respect to Level 1 and Level 2 motion pictures Employer may

hire two individuals on any of the applicable Qualification Lists to work in the

next higher Qualification List category than the one on which they are placed. For

example, a Qualified Second Assistant Director may be employed in the Third

Area as a First Assistant Director.

DGA Trainees

(i) DGA Trainees shall be paid no less than a discounted initial minimum

salary equal to fifty percent (50%) of the minimum salaries in Paragraph

14-103 of the BA, provided that the salary paid for any hour of work shall

in no event be less than federal or state minimum wage.

(ii) All other provisions of Section 14-100 of the BA apply to the employment

of DGA Trainees.

K. Article 15-Non-Discrimination

L. Article 17-Miscellaneous Provisions

M. Article 18-Supplemental Markets

N. Article 19-Theatrical Motion Pictures Released to Free Television


O. Article 21-Copyright Royalty Tribunal

P. Article 22-Responsibility for Residuals Payments

III. Level 3. On motion pictures with budgets greater than $2,600,000 but equal to


hereof, and to all terms of the BA with the following modifications:

A. Article 3-Director’s Compensation and Related Matters: The Director’s initial

compensation shall be no less than $75,000 for a minimum guarantee of 13 weeks

(inclusive of two weeks preparation time and one week cutting allowance time).

Additional deferred compensation, if any, shall be subject to individual

negotiation.

The Director shall be pay or play for the “run of the picture” beginning the earlier

of (a) the closing of the financing for the picture, (b) issuance of a completion

bond or guarantee, (c) the date any cast member becomes pay or play. The pay or

play obligation shall be satisfied by payment of the agreed salary owed for the

unexpired period of the Director’s guarantee.

A replacement Director shall be paid 125% of the previous Director’s salary, for

the unexpired period of the previous Director’s guarantee.


For pictures at budget Levels 3 and 4, the Guild will give good faith consideration

to waivers of the minimum salary requirements for a Director directing his or her

first theatrical motion picture.

Second Unit: The minimum preparation time for a Second Unit Director is one

day. However, this preparation time requirement shall not apply to any unplanned

units, emergencies or when preparation time is not needed because the Director of

the second unit has been working on the production in a different Guild capacity

covered by the terms of the BA.

The minimum compensation for a Second Unit Director is $1,500 per day.

B. 7-505-Preparation and Preview of Director’s Cut: In lieu of the ten (10) week

period provided for the accomplishment of the Director’s Cut in BA Paragraph 7-

505(b)(1), Employer shall provide a minimum eight (8) week period for the

accomplishment of the Director’s Cut followed by a screening of the Director’s

Cut pursuant to BA Paragraph 7-505(d).

The preview of the Director’s Cut or of the picture may be screened on video of

not less than digital on-line quality, for no less than 25 people exclusive of

Employees and family of Employer. DGA will consider in good faith requests to

screen the Director’s Cut on broadcast quality resolution video. The Director will

be notified of any preview as per the BA. Employer will send the Director to any

preview conducted by the company outside of Los Angeles or Orange County as


per the BA; the Director need not be flown in first class, but will fly in the best

class afforded by Employer to anyone else attending the preview. These

obligations do not apply to previews conducted by third-party distributors, unless

such party is signatory to the DGA Basic Agreement.

C. Article 13-Unit Production Managers and Assistant Directors: Assistant Directors

and Unit Production Managers shall be paid no less than discounted initial

minimum salary equal to sixty percent (60%) of the minimum weekly salaries in

Paragraph 13-101(a) of the BA. The weekly production fee is $200 for Unit

Production Managers and First Assistant Directors, and $150 for the Key Second

Assistant Director. Daily salaries, including production fees, shall be computed at

one-fourth (1/4) the weekly rate. The salary for distant location shall be the same

as the studio rate. There shall be no Vacation Pay (4% per Paragraph 13-601),

Unworked Holiday Pay (3.719% per Paragraph 13-115), Wrap Supervision

Allowance ($50.00; $55.00 effective 7-1-15), or Distant Location Allowance

($20.00; $21.00 effective 7-1-15 per Paragraph 13-114). Unit Production

Managers, First Assistant Directors, and Second Assistant Directors shall be paid

Completion of Assignment Pay computed pursuant to BA Paragraphs 13-103 and

13-104, based on the salaries set forth herein. A sixth day worked in a workweek

shall be paid at straight time; a seventh day worked in a workweek shall be paid at

150% of straight time. The minimum preparation time shall be ten (10) days for


the First Assistant Director, and five (5) days for the Key Second Assistant

Director.

Any Second Assistant Director hired in addition to the Key Second Assistant

Director may be paid no less than discounted initial minimum salary equal to sixty

percent (60%) of the minimum weekly salaries in Paragraph 13-101(a) of the BA

for an Additional Second Assistant Director. No production fee is due.

Article 14: Employer may employ one Assistant Director or one Unit Production

Manager who is not on the applicable Qualification List (as defined below). With

respect to all other classifications covered by Article 14 of the BA, Employer shall

make a reasonably diligent effort to find Unit Production Managers or Assistant

Directors (as the case may be) on the applicable Qualification List before

employing any person not on the applicable Qualification List, and must document

that effort at DGA’s request. Employer may not offer better rates or conditions of

employment to non-Qualification List Employees than those offered to

Qualification List Employees.

Applicable Qualification List for purposes of Levels 1, 2 and 3 pictures shall be

defined as the Southern California Entertainment List, the New York

Entertainment Qualification List and the Third Area Qualification List.

Individuals on any one of the applicable Qualification Lists may be hired to work

in any geographic location.


DGA Trainees

(i) DGA Trainees shall be paid no less than a discounted initial minimum

salary equal to sixty percent (60%) of the minimum salaries in Paragraph

14-103 of the BA, provided that the salary paid for any hour of work shall

in no event be less than the federal or state minimum wage.

(ii) All other provisions of Section 14-100 of the BA apply to the employment

of DGA Trainees.

IV. Level 4. On motion pictures with budgets greater than $3,750,000 but equal to


hereof, and to all terms of the BA with the following modifications:

A. Article 3-Director’s Compensation and Related Matters:

(i) For pictures with budgets greater than $3,750,000 but equal to or less than

$5,500,000, Directors, including Second Unit Directors, may be paid

discounted salary no less than seventy-five percent (75%) of the applicable

minimum salary in Article 3 of the BA. No deferment shall be required. A

replacement Director shall be paid not less than 150% of minimum

compensation (as set forth herein) for the work performed.

(ii) For pictures with budgets greater than $5,500,000 but equal to or less than



discounted salary no less than seventy-five percent (75%) of the applicable




(iii) For pictures with budgets greater than $8,500,000 but equal to or less than


discounted salary no less than ninety percent (90%) of the applicable




(iv) For pictures at budget Levels 3 and 4, the Guild will give good faith

consideration to waivers of the minimum salary requirements for a Director

directing his or her first theatrical motion picture.

B. Article 13-Assistant Directors and Unit Production Managers:



paid initial compensation, and production fees, no less than seventy percent

(70%) of the minimums in Paragraphs 13-101(a) and 13-101 (b) of the BA.




paid initial compensation, and production fees, no less than eighty percent

(80%) of the minimums in Paragraphs 13-101(a) and 13-101 (b) of the BA.



paid initial compensation, and production fees, no less than ninety percent

(90%) of the minimums in Paragraphs 13-101(a) and 13-101(b) of the BA.

1. Unit Production Managers and Assistant Directors shall be paid

Completion of Assignment Pay based on the salaries set forth

herein, i.e. 70%, 80%, or 90% of the minimums in BA Paragraph

13-101(a), as applicable, and computed pursuant to BA Paragraphs

13-103 and 13-104.

2. The Guild will consider requests for waivers to apply the studio rate

for distant location employment when the production is on a five-

day per week schedule.

3. There shall be no Vacation Pay (4% per Paragraph 13-601),

Unworked Holiday Pay (3.719% per Paragraph 13-115), Wrap

Supervision Allowance ($50.00; $55.00 effective 7-1-15), or

Distant Location Allowance ($20.00; $21.00 effective 7-1-15) per

Paragraph 13-114) for pictures with budgets less than $8,500,000.


4. Any Second Assistant Director hired in addition to the Key Second

Assistant Director may be paid initial compensation no less than

seventy percent (70%) with respect to the lower level of budgets

within this Level IV, eighty percent (80%), with respect to the

middle level of this Level IV, or ninety percent (90%) with respect

to the top level of this Level IV; of the minimum salaries in

Paragraph 13-101(a) of the BA. No production fee is due for the

Second Second Assistant Director.

C. Article 14: Employer must give preference of employment to Employees as

provided in Article 14 of the BA. However, if Employer is unable to find

Assistant Directors and Unit Production Managers on the applicable Qualification

Lists who will accept employment at the rates and conditions offered in

accordance with this agreement, Employer may employ, on productions based in

the Southern California area or the New York area, one (1) Unit Production

Manager or Assistant Director who is on the Third Area Qualification List,

provided that Employer must make a reasonably diligent effort to find Unit

Production Managers or Assistant Directors (as the case may be) on the applicable

Qualification List before employing any person not on the applicable Qualification

List, and document that effort at DGA’s request, and provided Employer may not

offer better rates or conditions of employment to non-Qualification List Employees

than to Qualification List Employees.


DGA Trainees


$5,500,000, DGA Trainees shall be paid no less than a discounted initial

minimum salary equal to seventy percent (70%) of the minimum salaries in

Paragraph 14-103 of the BA, provided that the salary paid for any hour of



$8,500,000, DGA Trainees shall be paid no less than a discounted initial

minimum salary equal to eighty percent (80%) of the minimum salaries in




$11,000,000 DGA Trainees shall be paid no less than a discounted initial

minimum salary equal to ninety percent (90%) of the minimum salaries in



(iv) All other provisions of Section 14-100 of the BA apply to the employment

of DGA Trainees.

V. The provisions in this paragraph shall apply to all covered motion pictures the

production costs of which are $11,000,000 million or below.


A. 7-401-Dailies: Employer need only provide dailies on video. Dailies shall be

provided as soon as practicable. If Employer provides dailies on video, Employer

shall make best efforts to provide them within 24 hours. Director will be provided

with a copy of the dailies simultaneously with the producer and others who need to

view the dailies, and Employer will furnish the Director a list of those who receive

dailies.

B. Employer may view and have access to materials from the editor’s assembly for

the purpose of preparing trailers and marketing materials provided the Director is

present, Employer does not impede the completion of the assembly or the

preparation of the Director’s Cut, and Employer does not cut behind the Director.

C. 13-216 Dinner Allowance: If Employer provides meals to the Unit Production

Manager and Assistant Directors, including walking meals, no dinner allowance

need be paid.

D. 4-104(d) and 13-114 Per Diem: Each Employee employed on distant location will

receive a reasonable per diem payment which shall be no less than the greater of

the minimum per diem payments set forth in the Screen Actors Guild ("SAG") or

I.A.T.S.E. minimum basic agreements, provided that if SAG or I.A.T.S.E. shall

provide a lower per diem under a low budget agreement, then the greater of such

low budget agreement per diem payments shall be payable to each Employee.

However, Employees covered by this provision may not be paid a lower per diem


than that payable to SAG or I.A.T.S.E. employees employed on the same picture

pursuant to either union's applicable collective bargaining agreement.

E. On any covered picture on which Employer employs two Second Assistant

Directors plus either an Additional Second Assistant Director or a DGA Trainee,

persons not covered by the BA may perform Second Assistant Director duties.

F. It is understood and agreed that in the event there are no available persons on the

applicable Qualification List to perform the work of a Second Assistant Director,

the next preference in employment shall be DGA Trainees; if no such Trainees are

available, then Employer may hire Second Assistant Directors from any source.

Days so worked by DGA Trainees shall be counted towards fulfillment of their

training time only.

G. If Employees furnish their own transportation to or from location within the studio

zone as defined in the Screen Actors Guild Basic Agreement, mileage expense

need not be paid, provided no member of the cast or crew is paid mileage.

H. Travel: Travel for all Employees will be in coach for (a) non-stop domestic flights

of less than 1,000 air miles from departure point to final destination; (b) flights

between Los Angeles and Vancouver; or (c) flights of less than 1,000 air miles

between the United States and either Toronto or Vancouver. Except as noted

above, travel will be business class for non-stop domestic or foreign flights of

1,000 or more miles from departure point to final destination.


If an Employee is traveling on the same flight as another employee employed on

the same production by the same Employer and the other employee is entitled to

travel in a higher class of transportation pursuant to the minimum terms of the

collective bargaining agreement under which he/she is employed, then the

Employee shall be upgraded to the same class of transportation as is afforded to

the other employee.

I. The parties acknowledge that there may be no prepayment of residuals except as

permitted by Articles 18 and 19 of the BA.

J. The DGA agrees to make appropriate accommodations in its initiation fees in

recognition of the economics of this type of production.

K. In the event Employer has employed an Assistant Director or Unit Production

Manager who is not on the Qualification List before it becomes signatory to the

Basic Agreement, such employment shall be considered as the allowable exception

to the applicable Qualification List provisions as set forth in Paragraphs II. J. and

III. D. of this Agreement.

L. 12-205 UPM/Producer: Employer shall make pension and health contributions on

behalf of any Unit Production Manager who is also employed as a producer based

on the salary paid for Unit Production Manager services, but in no event shall

contributions be made on an amount less than the total salary paid for all services

on the picture, or $100,000, whichever is less. In the event the salary for Unit


Production Manager services only exceeds $100,000, Employer shall pay

contributions on the actual Unit Production Manager salary.

M. 3-109 Sequel Payments: In the event the Employer produces a theatrical motion

picture which is a sequel to a theatrical motion picture covered under the DGA

Low Budget Sideletter, the Employer will pay to the Director of the original

theatrical motion picture, upon commencement of principal photography of the

sequel theatrical motion picture, an amount equal to $10,000 if the sequel

theatrical motion picture is produced at Levels 1, 2, or 3 above, or $20,000 if the

sequel theatrical motion picture is produced at Level 4 above, provided:

(1) that the original theatrical motion picture and the sequel are produced by

the same Employer;

(2) that principal photography of the original theatrical motion picture

commenced on or after July 1, 2014; and

(3) that the sequel is based on an original screenplay which utilizes the leading

character or characters of the original theatrical motion picture in a

substantially different story.

Only one payment shall be due under this provision, irrespective of the number of

sequel theatrical motion pictures produced.


If the Director of the original theatrical motion picture also directs the sequel, the

amount payable pursuant to this paragraph M. shall be credited against the

compensation payable to the Director for the sequel.

VI. For any Director assigned to a motion picture the production costs of which are

within Levels 1, 2, 3 or 4, Employer shall use a deal memorandum in content and form

substantially as set forth in Exhibit A attached to this Sideletter. For any Unit Production

Manager and Assistant Director assigned to such a motion picture, Employer shall use a

deal memorandum in content and form substantially as set forth in Exhibit B attached to

this Sideletter.

VII. In all respects other than as expressly provided in this Sideletter, the BA governs the

employment of Employees on motion pictures within Levels 3 and 4.

VIII. The term of this Agreement shall be from July 1, 2014 to June 30, 2017

AGREED TO AND ACCEPTED AGREED TO AND ACCEPTED

Directors Guild of America, Inc. Employer:____________________

By:_________________________ By:__________________________

Title:_______________________ Title:________________________

Date:_______________________ Date:________________________

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